Charities heading for tax windfall

Children’s charities could be in for a multi-million pound
windfall following a High Court ruling last week.

In a test case, the Children’s Society successfully argued
that it should be able to reclaim VAT on fundraising costs, such as
recruiting new donors. The charity has estimated that savings to be
made by the voluntary sector as a whole could amount to “tens
of millions of pounds”.

A spokesperson for the charity said its own windfall could add up
to around £500,000 this year – enough to fund a small refuge
for 18 months for runaway children. “The Children’s
Society has led the fight to make sure the money donated by
charities is not skimmed off in VAT,” he said.

Welcoming the High Court ruling, a spokesperson for the National
Council for Voluntary Organisations said the government should make
its position clear so that all charities could benefit.

A spokesperson for HM Revenue and Customs said officials would
study the decision closely before deciding whether to appeal.